Hepatitis C virus (HCV) encodes a polyprotein of which the majority of nonstructural proteins are matured by the viral serine proteinase located in the N terminus of NS3. Intracellular studies using recombinant vaccinia virus have shown that both NS3 and its cofactor NS4A are required to enhance processing at the NS3-dependent cleavage sites. We developed an in vitro (cell-free) assay in which the HCV serine proteinase was shown to be enzymatically active, by mixing lysates of cells expressing either the serine proteinase or a nonstructural protein substrate. NS3 cleaved in a highly reproducible manner at the NS5A/5B site in the presence of NS4A, whereas NS3 alone was enzymatically inactive. NS4A could be provided either linked to NS3 or as part of the substrate. In contrast, irrespective of the presence or absence of NS4A, no NS3-mediated processing was observed at the NS3/4A, NS4A/4B, and NS4B/5A sites in this assay. In vitro cleavage at the NS5A/5B site occurred rapidly, within 1 min at temperatures ranging from 0 to 20 degrees, but was incomplete and required detergent-solubilized lysates. General serine proteinase inhibitors did not decrease processing activity. The in vitro model described in this study is a new tool: (1) to study the structure and the function of HCV serine proteinase and NS5A/5B cleavage site, and (2) to test NS3 serine proteinase inhibitors.